The Reality of Parity Enforcement

welcome to Mental Health Evolution, a podcast about what's changing in mental health and why why it matters. I'm your host, Rachel Harrison, inviting you into honest Conversations with people from all perspectives in the field. Clinicians, tech founders, investors, insurance companies, and all the folks in between. Let's explore what's working, what's not, and what's next. Hello. Hello, everyone. Welcome back to the Mental Health Evolution podcast. Today we are going to do a solo episode. I'm Rachel Harrison, and we're going to talk a little bit about mental health parity and its enforcement and what it is and how, why it matters to everyone in this industry and people who access mental health care. If you spent any time with insurance, you already know that healthcare coverage, mental health coverage specifically, often works differently in practice than it does on paper. And today I want to talk about a case that makes that gap very concrete. Aetna was just fined $550,000 by the state of Pennsylvania for mental health parody violations, and the details of what they found are definitely worth understanding. Parity is not a new topic here. We covered this from a policy and advocacy perspective on our episode with Deborah Steinberg of the Legal Action center, and we'll put that link in the show notes in case you want to go back and reference that as well. But that conversation gave a strong foundation for understanding what parity is supposed to mean and why it's been so difficult to achieve that in practice. What we have not talked about yet is enforcement, what it actually looks like when a state holds an insurer accountable, what the violations were and what this case tells us about the broader landscape. Right now. We are not just trying to highlight Aetna because they are certainly not alone, but the example of what's happening gives us a great talking point. And so that's what today's episode is all about. As always, we like to provide a little bit of context around parity and parody. If you're like, gosh, I've heard that word. It's familiar. I should know what it means. But I'm not referencing that right now. Essentially, it's that mental health care and substance abuse will be treated just like any other medical condition. And insurers need to show that they are reimbursing in the same way that they are providing authorizations and access to care in the same way as they would other medical conditions. But let's start with some of these articles, because I think this will give you some background, too. The first one is about the case we're going to talk about here today, and it's titled the Shapiro Administration Protects consumers fines Aetna 550,000 for violations of Mental Health Parity Laws, published by the Pennsylvania Insurance Department. And this is the official state announcement detailing exactly what Aetna did. So we're going to talk a little bit about it. But if you want to do a little bit more of a deep dive and figure out what that's all about, we have that article referenced for you. The second article here is called Pennsylvania Insurance regulators find Aetna 550,000 for violations of MENT Parity Regulations. This one similar title I know published by the Philadelphia Inquirer. And this piece adds some important historical context, including that Aetna was fined by Pennsylvania for similar violations back in 2019. And it covers how the company applied more stringent standards to autism therapy in particular and opioid addiction treatment than to medical and surgical care. So that link there for you. The next article is called Health Insurers Pay Penalty for Health Mental Health Parity Compliance Failures. This one published by the HIPAA Journal. And this article broadens the picture covering a similar fine against Regents Blue Shield in Washington State and an Anthem class action settlement. And just showing, like I said earlier in the intro, that Aetna is just part of of the problem. They're, they're the most recent example that we're talking about, but certainly they are not alone. And lastly, the last article is titled Departments Announce non enforcement of 2024 mental health parity Rule, published by APA Services. And this piece explains the federal enforcement pause on the 2024 MHPAEA final rule. I'm going to get into details about what that means. It's essentially the mental health parity and addiction equity. So you'll hear me reference that and I'll try to spell that out as we're talking today and what that means for existing protections and why state level enforcements like Aetna, the Aetna fine are carrying more weight right now. So let's dive into discussing this a little bit more before we get into the specifics of the Aetna case. I do want to make sure that we are talking about parity and getting a clear definition, getting a little bit of the history and what it what it looks like when it impacts people's lives. So as I mentioned before, the MHPAEA called the Mental Health Parity Addiction and Equity act, was passed in 2008. So a good while back. The core principle is straightforward, like I mentioned before, that insurance plans cover mental health and substance abuse disorder services. They cannot impose more restrictive limits on those services than they impose on medical or surgical care. So it means things like comparable CO pays, comparable prior authorization requirements comparable visit limits, comparable criteria for what counts as medically necessary, and comparable reimbursement rates. The law has been on the books for nearly 20 years and yet enforcement has been inconsistent. Loopholes have definitely been exploited, and the gap between between what the law says and what people might actually experience has remained pretty wide. So let's talk about what happened in Pennsylvania, the most recent piece of parody. The Pennsylvania Insurance Department conducted what is called a market conduct exam, which is essentially is their deep dive audit of how an insurer is actually operating. The exam covered Aetna's practices from October 2021 to through December 2022. What they found was a pattern of failures that had real consequences for policyholders. Aetna had incomplete claim files for autism Spectrum disorder services, including Applied Behavior Analysis therapy. There were unexplained delays in approving or denying claims. And this is kind of a known thing that can happen where claims end up in some la la land. They're not approved, they're not denied, and they're just sitting there. There were improper claim denials tied to poor internal communication about prior approvals. And critically, the department found that Aetna was using flawed methods for reviewing its own parity compliance, meaning the internal processes designed to catch these problems were basically not working. There was also a very specific issue around transparency. Aetna was not clearly communicating to members what their cost sharing responsibilities were for autism related services, and they were not sending required claim delay letters during this period. These are not minor paperwork issues because they translate to families not understanding what they owe, providers not getting paid, and children not getting the therapy that they are entitled to under their plan. So the result is this $550,000 fine, a consent order signed in January 2026, and a requirement to reprocess affected claims and repay members with 12 months. Here is what I want to highlight about this case. In particular, it's not the first time, as I mentioned in those articles, Aetna has been here. Pennsylvania specifically fined Aetna for similar parity violations back in 2019, and many of the same category violations appeared again more than two years later. And that raises questions about whether fines at this level are functioning as a meaningful deterrent or whether they are just a cost of doing business for a company of Aetna's size. And again, Aetna's not alone. Washington state fined regents Blue Shield 550,000 for a lack of transparency around its parity compliance, finding that the insurer could not provide documentation demonstrating that its mental health and substance abuse disorder benefits were comparable to its medical and surgical benefits. Anthem, now known as Elephants Health, agreed to a nearly 13 million class action settlement over allegations that it denied claims for residential mental health and substance abuse disorder treatment using medical necessity criteria that were more restrictive than those that applied to comparable medical care. These cases are landing across different states, different insurers, different types of violations, although the through line is the same that mental health services are being treated as a category that requires more justification, more documentation, more prior authorization, and more hurdles than medical care in violation of a law that has been in place for almost two decades. So that's what's happening at the state level. Let's talk about the federal level, because this is where things get a little more complicated. In 2024, the Biden administration, remember the original law was passed in 2008. Yeah, it's been around a while. 2024 Biden issued what was called the 2024 Final Rule, a major update to the MHPAEA regulations designed to close long standing loopholes, particularly around what are known as non quantitative treatment limitations. So these are the harder to see restrictions like prior authorization requirements, step therapy protocols, network adequacy standards, and reimbursement rate structures that can effectively make mental health care less accessible even when the plan technically covers it. On paper, these are some of the loopholes that were being closed. And in May 2025, the Departments of Labor, Health and Human Services and Treasury announced that they would not enforce the 2024 final rule following a legal challenge from an employer industry coalition. The Administration has indicated it may revise or rescind that rule through a formal rulemaking process. This does not mean that the parity law disappeared. The core statutory requirements of MHPAEA are still in effect, and the 2013 regulations and the 2021 Consolidated Appropriations act requirements still apply. But it does mean that the strongest and most specific new enforcement tools are on hold, and it creates uncertainty about how vigorously the federal government will pursue parity compliance in the current environment. I will mention that we talked a good length about that in the previous podcast episode with Deborah Steinberg that I mentioned earlier. So that is the landscape in which state insurance departments like Pennsylvania's become more important. When federal enforcement slows. States that have built robust market conduct exam programs and are willing to use them are a last line of accountability. I want to pause this kind of broader official conversation and talk about some of the experiences that I have had locally around parity, because in some of the states where we operate, this is something that has been a big topic so it has been interesting to me because here in Maryland there was a bill this past session called the Maryland Senate Bill 774, which focused on increasing transparency around how insurers are covering and reimbursing behavioral health care compared to medical care. And it's a good example of how states are stepping in to strengthen and clarify existing federal parity requirements, especially where enforcement is limited. This bill would have helped make it clear where disparities exist in things like reimbursement and access, but it did not move forward in the House before the end of the session. It hasn't become law, but it did progress, and it's expected that something in this space may be reintroduced in a future session. These are definitely things that if they're happening in your state and you're interested in supporting it, you can definitely sign petitions and get involved to how to try to help some of these bills get passed. So what this means for our field I want to spend a moment talking to people who are maybe clinicians, maybe practice owners, business owners, because the story affects you whether or not you ever file a parity complaint yourself. Every time a client is denied coverage for a service that their plan should cover, that denial lands somewhere. Sometimes it lands with the client and maybe they can or maybe they can't afford to pay out of pocket and they either go without care or maybe they drop out of treatment. Sometimes it lands with the practice or the provider which absorbs the loss or spends hours on the phone trying to appeal the decision. As many people know, you might spend easily two hours on a phone call trying to get ahold of someone to address an issue with an insurance claim. Sometimes it means a provider stops accepting that insurance entirely, which then shrinks the network and further makes access harder for everyone. The Aetna case is specifically focused on autism spectrum disorder services and applied behavior analysis therapy. But the mechanisms at work, the flawed compliance methods, the opaque cost sharing disclosures, unexplained claim delays, improper denials, those show up in the full range of mental health and substance abuse disorder services. If you have seen clients lose coverage mid treatment, received denials that felt inconsistent with the clinical picture, or spent significant time on prior authorization processes that your medical colleagues do not deal with for comparable levels of care, then you have seen parity failure in action. Knowing that enforcement exists and that it sometimes works matters. State insurance departments have compliant mechanisms and documented pattern of complaints can contribute to the kind of market conduct exams that led to the Aetna finding. That does not mean that the system is easy to navigate, but it does mean that it is not entirely without teeth. And for those of you who might be thinking of which insurers to credential with or how to counsel clients about their coverage, cases like this are worth paying attention to. They tell you something about how an insurer operates internally and whether they take their parity obligations seriously. Looking ahead, I think it's important to think about that. Parity enforcement is not a solved problem. It's an ongoing one, and right now it is happening primarily at the state level, while the federal picture remains uncertain. Some states are investing seriously in this work, others are not. The variation matters enormously depending on where your clients live and which insurance products they hold. If you want to go deeper on the policy and advocacy side of parity, our episode that I've mentioned I think now two other times with Deborah Steinberg of the Legal Action center is a strong companion to this one. The conversation that gets into what parity is supposed to mean and the advocacy work being done makes it real. This episode is about what happens when it falls short and what enforcement can look like when states step up. And a lot of states have insurance commissions that are really listening, paying attention and doing just that. So thank you for listening to today's episode. And though we talked about the Aetna case in specific, remember this is happening all over and your voice matters. If you want to get involved, you can certainly sign petitions for legislation in your state state. You can also send a complaint to your state's insurance commission. If you believe as a client or as a clinician, that there have been issues with the way that you've been able to access mental health care or substance abuse care, it's worth raising your voice. So we all work together to do the best we can to get the best care for anyone that needs to access mental health and substance abuse services. So we will be back next week talking about other issues shaping mental health care today. Thank you for listening to this one and bye for now.